Solana's token fell from $141 to a low of a little over $94. When the calendar turned to 2022, Solana's limitations started to become apparent.īarely a month into the year, a network outage took Solana down for over 24 hours. Serum, another exchange backed by Bankman-Fried, was built on Solana. Much of Solana's popularity was built around growing interest in NFTs. Yet even before the collapse of FTX, Solana faced a series of public struggles, which challenged the protocol's claim that it was a superior technology. Solana soared over the course of 2021, with a single token gaining 12,000% for the year and reaching $250 by November. Solana's supposed differentiating factor was augmenting proof-of-stake with proof-of-history - the ability to prove that a transaction happened at a particular moment. Rather than relying on energy-intensive mining, proof-of-stake systems ask big users to offer up collateral, or stake, to become "validators." Instead of solving for a cryptographic hash, as with bitcoin, proof-of-work validators verify transaction activity and maintain the blockchain's "books," in exchange for a proportional cut of transaction fees. Ethereum and rival Solana use proof-of-stake. Its 24-hour trading volume is up over 200% on a relative basis.ĭuring the crypto market's heyday in 2021, Bankman-Fried was hardly alone in his bullishness.ĭevelopers raved about Solana's support for smart contracts, pieces of code that execute pre-programmed directives, as well as an innovative proof-of-history consensus mechanism.Ĭonsensus mechanisms are how blockchain platforms assess the validity of an executed transaction, tracking who owns what and how well the system is working based on a consensus between multiple record-keeping computers called nodes.īitcoin uses a proof-of-work mechanism. Solana has since come off the lows, with a market cap now crossing $3.5 billion. In just one hour of trading on Thursday, Solana slid 5.8%, bringing it to the lowest since early 2021, around the time that Bankman-Fried began to vocally offer his support for the project. Among the 20 most-valuable cryptocurrencies tracked by CoinMarketCap, the next biggest loser over that stretch is Dogecoin, which has fallen 9%. Ether has held steady, shedding 1.7% in the same time period, while bitcoin has only dropped 1.2%. In the last week, Solana has declined over 30%. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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